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January 23, 2010 - Rising costs of athletics puts pressure on colleges

The Indiana Business Journal published an article about the rising concerns of the costs of college athletics, particularly as it relates to the current economic challenges in higher education. Escalating coaches’ salaries and the costs to build and maintain athletics facilities are signficant expenses which puts the economic stability of athletic departments at risk.

“During the most recent fiscal year, only 12 of 120 [NCAA Division I-A athletic departments] either broke even or made money,” said R. Gerald Turner, president of Southern Methodist University and co-chairman of the Knight Commission on Intercollegiate Athletics. “A few elite programs have set a standard for spending that has created an arms race which makes it difficult, if not impossible, to sustain the business of college athletics as a whole.”

Another factor pushing schools to the brink is the arms race surrounding athletics facilities. “When you consider debt service to build all this sports infrastructure, the picture is even worse,” Turner said.

Most university presidents are supportive of intercollegiate athletics on their campuses to engage the campus and community, and to build strong institutional identity. However, the escalating costs are creating pressure on campus administrators and athletic departments, particularly at institutions with less economic resources.

“Athletics is an important part of our institutional experience,” said Butler University President Bobby Fong. “It’s a focus of student and alumni enthusiasm, and it’s an important reputational tool."

But Fong admits Butler doesn’t have the alumni support or the money generated by large media-rights deals that bigger schools have. “That’s why we have such churn with our basketball coach position.”

“I do have concerns that coaches’ salaries are out of line with the general enterprise of the university,” Fong said. “This is a marketplace where we feel immense pressure that may push and pull us in directions we may not want to go in order to compete.”

Jim Isch, NCAA interim president, acknowledges that a recent survey of presidents of NCAA Division I schools shows 85 percent think football and basketball coaches’ salaries are too high. The NCAA’s own studies show that, over the last five years, college athletic department budgets have grown 43 percent but those departments’ revenue grew only 33 percent.

Isch conceded the NCAA could “establish some [spending] parameters,” but he said it’s up to each school to regulate itself.

A recent study conducted for the Knight Commission found that only six of the 120 NCAA Division I-A athletic departments made money in each of the last five years.

“That means a lot of money is being siphoned away from academics and into athletics,” said Andrew Zimbalist, a sports economist and professor at Smith College.

William "Brit" Kirwan, chancellor of the University System of Maryland and co-chairman of the Knight Commission on Intercollegiate Athletics noted the costs of college sports are escalating “at the very time that tuitions are going up, faculty are being furloughed, classes are being cut, and enrollment is being capped.”